This article is a field case on business valuation woven around the dilemma for a young EdTech firm to choose between the two opportunities that came out as collaterals to the nCOVID-19 pandemic in 2020. The selection would be based on the principle of firm value maximization, for which the opportunities needed to be valued. Students will learn the application of the venture capital (VC) model used for start-up firms. Students are challenged to apply the discounted cash flow (DCF) model and the relative valuation (RV) model, and, in the process, learn to estimate the cost of equity using the capital asset pricing model (CAPM). The case provides an opportunity to learn how to build the narrative around numbers by augmenting a discussion on the impact of a pandemic on various input variables used in the valuation exercise. The case is most suitable for the course on business valuation in management and doctoral programmes.

PurposeThe study aims to report empirical evidence on the impact of mandatory adoption of International Financial Reporting Standards (IFRS) in India on the voluntary intellectual capital reporting (ICR) and its value relevance. The study also tests the effect of term-weighting schemes used for information retrieval studies in the domain area of ICR.Design/methodology/approachThe study uses computational linguistics tools to measure ICR by Indian firms in the period 2014–2019. The study developed term frequencies for 23 ICR attributes using bag-of-words methodology from the annual reports. The word counts were used to construct two distinct measures of ICR, quantity and quality, deploying different term-weighting schemes, equal weighting and the term frequency-inverted document frequency (TF-IDF) weighting, respectively. A combination of parametric and non-parametric tests has been employed to examine the different hypothesis.FindingsThe quantity of ICR was found to have increased post-IFRS adoption. However, the quality of ICR had fallen significantly, which resulted in the loss of value relevance of ICR. Firms making higher disclosures but of inferior quality experienced suboptimal market returns. Variation in inter-firm ICR has reduced. Size effect and sector effect continue but have attenuated. The study acknowledges the enormous impact of term-weighting schemes, used for information retrieval studies, in the domain area of ICR.Practical implicationsThe study strongly adds to the momentum in favour of a formal ICR standard to improve its quality, restore its value relevance and facilitate more effective decision-making where the valuation of a firm is a critical input. The study presages the firms not to make poor-quality disclosures to avoid suboptimal stock performance.Originality/valueThe study sheds light on the impact of the adoption of post-IFRS on ICR in India. The study establishes the effect of term-weighting schemes, used for linguistic studies, in the domain area of ICR and adds to the literature by explaining one of the critical reasons for the dichotomy in ICR trends.